Local Tech Startup Helping Sari-Sari Stores Has Now Raised Over P1.46 Billion
Filipino startup Growsari has raised an undisclosed amount in a Series B funding round, the company announced on Monday, June 21. The B2B platform that helps sari-sari stores boost their income through a more efficient logistics and delivery system says it has now raised a total of over $30 million (about P1.46 billion) across seed, Series A and B rounds since it was founded in 2016.
Participating in this latest funding round are Pavilion Capital, China’s Tencent, International Finance Corporation, ICCP SBI Venture Partners, and Singapore-based growth fund Saison Capital, along with existing investors Gokongwei-led Robinsons Retail Holdings, Inc. and JG Digital Equity Ventures, and Singapore-based Wavemaker Partners.
During its Series A funding round in 2018, JG Summit Holdings and Robinsons Retail Holdings reportedly invested in the company, part of a total funding round that was worth a cool $14 million, one of the largest in the country. Robinsons is now also a partner of Growsari—some of its supermarkets act as Growsari’s fulfillment hubs, where its personnel purchases clients’ orders.
Growsari was founded by Reymund “ER” Rollan, Shiv Choudhury, Siddhartha Kongara, and Andrzej Ogonowski as a tech-enabled B2B platform that outfits Philippine sari-sari store owners with inventory, infrastructure, and tools to manage and grow their business while generating crucial data and market insights for manufacturers and distributors.
“Growsari aims to empower and significantly increase the earnings of sari-sari stores in the Philippines by providing direct access to a wide assortment of affordable products, e-businesses, and financial assistance,” said Growsari co-founder ER Rollan. “With the fresh funds, we aim to more than double Growsari’s existing coverage and service more than 300,000 sari-sari stores, including those in Visayas and Mindanao. This will also help us broaden our supplier marketplace with new third party partners and scale our financial service pilots.”
According to the company, Growsari has grown from a base of 1,000 sari-sari stores in three cities in 2018 to more than 50,000 stores in over 100 municipalities across Luzon as of 2020. The startup provides sari-sari stores with an app where they can choose the items they need to sell, order them online, and wait for them to be delivered. Stores order through the app and Growsari delivers the items straight to the stores the next day. Deliveries are free of charge and are sold at relatively cheaper prices than if owners had bought them through other channels. Plus, owners don’t need to physically leave the store to go out and buy fresh merchandise.
In turn, Growsari earns by combining orders from multiple stores and buying the items at relatively lower prices.
Co-founder Rollan, who worked for years in Singapore with companies such as Procter and Gamble, Boston Consulting Group, and Unilever, said that understanding the so-called mom-and-pop channel was his starting point in establishing Growsari.
“Anyone who has worked long enough in consumer goods in this region (Asia Pacific), would need to contend with the opportunities and challenges brought about by the ‘mom and pop,’ channel,” Rollan told Esquire Philippines in a previous interview. “It’s largely an Asian phenomenon. All of the clients and companies I’ve worked with in the past continue to struggle with how best to engage, activate, and understand this channel better. And they can’t not understand it because half of the category volume today still passes through it.”
An estimated 84 percent of Filipinos still purchase essential items from the 1.1 million sari-sari stores in the Philippines. Based on Growsari’s studies, these mom-and-pop stores have an estimated retail sales value of $100 billion, and that 60 percent of fast-moving consumer goods (FMCG) shopper spending happening in such stores. About 90% of consumers live less than 100 meters away from a store and that, on average, consumers transact twice a day from their nearest sari-sari stores.
“Through GrowSari, we want to use proprietary technology to accelerate financial health for Filipino sari-sari store owners, helping them to use, protect, and grow their business in the long run and transforming sari-sari stores into comprehensive service hubs for the Philippines’ grassroots communities,” GrowSari CTO Siddhartha Kongara added.